The United States has long been a world leader in manufacturing. In 2019, the country was responsible for more than 18 percent of the world’s manufacturing output. That same year, the manufacturing sector employed more than 12 million people in the U.S.—about 8 percent of the workforce.
Despite its essential role in the economy, the manufacturing industry has not been immune to challenges in recent years. In particular, the rise of China as a major economic power has led to increased competition for manufacturing jobs and investment. In addition, automation and other technological changes have resulted in a decline in the number of jobs in the sector. As a result, the manufacturing industry is undergoing significant change.
The Impact of China on U.S. Manufacturing
For many years, China was seen as an opportunity for U.S. companies to reduce costs by outsourcing production to Chinese factories. Indeed, between 1999 and 2011, U.S.-based companies invested more than $600 billion in China. This trend led to a significant increase in Chinese exports of manufactured goods—from $100 billion in 2001 to more than $2 trillion in 2013.
However, this trend has begun to reverse in recent years as China has emerged as a major competitor to the U.S. in the manufacturing sector. Between 2013 and 2016, Chinese manufacturers’ share of global exports rose from 27 percent to 31 percent, while the U.S. share fell from 13 percent to 11 percent. In addition, Chinese companies have been investing more heavily in advanced technologies such as robotics and 3D printing, which are critical for remaining competitive in today’s manufacturing landscape. As a result, Chinese manufacturers are starting to win back market share from their U.S.-based counterparts.
The Decline of Manufacturing Jobs in the U.S.
In addition to competition from China, another challenge facing the U.S. manufacturing sector is automation and other technological changes that have led to a decline in manufacturing jobs in recent years. For example, between 2000 and 2010, there was a net loss of more than 5 million manufacturing jobs in the United States. A decline of about one-third of all manufacturing jobs over that period—as companies increasingly automated production processes or moved operations offshore to take advantage of lower labor costs. This trend has continued in recent years, with an additional 1 million manufacturing jobs lost between 2010 and 2017—despite an overall increase in employment during that period—as companies continue to move operations overseas.
Increasing regulation
Another challenge manufacturers in the U.S. face is increasing regulation from both the federal and state governments. These regulations can range from environmental to workplace safety regulations, which can be very costly for manufacturers to comply with. This is one of the reasons why many manufacturers have chosen to relocate their operations to countries with less stringent regulatory regimes.
Changing Marketplace
Another challenge facing the manufacturing industry is a changing marketplace. With technological advances, consumers can now purchase goods online from anywhere. This convenience has made it difficult for manufacturers to sell their products in brick-and-mortar stores. To compete, manufacturers must find new ways to market their products and reach customers.
Thankfully, various technologies are now helping the U.S. manufacturing industry adapt to these changes. Here are some of those technologies.
Smart Factories
One promising technology for the future of U.S. manufacturing is intelligent factories, which use interconnected machines and other technologies to automate processes and improve efficiency. These include robotics, advanced sensors, artificial intelligence, and big data analytics, helping manufacturers become more competitive. Additionally, the existence of MRAM in industrial computing applications is making these smart factories even smarter. These help with inventory management, predictive maintenance, and supply chain logistics.
3D Printing
Another emerging technology that has the potential to revolutionize manufacturing is 3D printing, also known as additive manufacturing. This process involves using computer-aided design software to create digital representations of products. These designs are then passed on to a 3D printer, which can produce higher-quality products in smaller batches than traditional manufacturing methods. This makes it easier for businesses to customize their products to meet changing market demands.
Advanced Materials
Another critical technology for the future of manufacturing is advanced materials such as nanomaterials and 3D printing materials. These materials have a range of applications in industry, including improved performance or safety in products like industrial machinery or vehicles. Thanks to ongoing research into these materials, we can expect exciting new developments in the manufacturing sector in the years ahead.
With these technologies, U.S. manufacturers are now better able to compete with foreign companies and stay ahead of emerging trends. Ultimately, this will ensure that the U.S. manufacturing industry remains a global leader in innovation and technology well into the future.
